Facing foreclosure can be overwhelming, but understanding the process in Colorado can empower you to make informed decisions and explore available options.
📘 What Is Foreclosure?
Foreclosure is the legal process lenders use to recover the balance of a loan from a borrower who has stopped making payments. In Colorado, the foreclosure process is typically nonjudicial, meaning it doesn’t require court intervention, but it does involve specific legal steps and timelines.
🛠️ Key Stages of the Colorado Foreclosure Process
1. Notice of Default
The process begins when a borrower misses a mortgage payment. After 30 days of nonpayment, the lender may issue a Notice of Default, informing the borrower of the delinquency and the intent to initiate foreclosure proceedings.
2. Notice of Election and Demand (NED)
If the default isn’t cured, the lender’s attorney files a NED with the county’s Public Trustee, officially starting the foreclosure process. The Public Trustee then sets a foreclosure sale date between 110 to 125 days from the NED filing.
3. Combined Notice
Within 20 days of recording the NED, the Public Trustee sends a Combined Notice to the borrower, detailing the foreclosure sale date and the borrower’s rights to cure or redeem the property. A second notice is sent between 45 to 60 days before the sale.
4. Right to Cure
Borrowers have the right to “cure” the default by paying the total amount owed, including fees, up to 15 days before the scheduled sale. This action halts the foreclosure process.
5. Rule 120 Hearing
Although Colorado primarily uses nonjudicial foreclosures, a Rule 120 hearing is required to obtain a court order authorizing the sale. Borrowers can contest the foreclosure during this hearing.
6. Foreclosure Sale
If the default isn’t cured, the property is sold at a public auction conducted by the Public Trustee. The highest bidder receives a Certificate of Purchase.
7. Redemption Period
Junior lienholders have eight business days after the sale to redeem the property by paying the full amount owed. Homeowners in Colorado generally do not have a post-sale redemption period.
⚖️ Deficiency Judgments in Colorado
If the foreclosure sale doesn’t cover the total debt owed, the lender may seek a deficiency judgment for the remaining balance. In Colorado, lenders have up to six years to file for such a judgment. However, borrowers can contest the amount if they believe the property was sold for less than its fair market value.
🧭 Navigating Foreclosure with Red Crane Company
At Red Crane Company, we understand the challenges of facing foreclosure. Our team specializes in helping Colorado homeowners explore alternatives, such as selling their homes quickly for cash, to avoid foreclosure and its long-term financial impacts.
- Learn more about our process: Sell Your House The Easy Way
- Reach out for assistance: Contact Us
🔗 Additional Resources